Dow bounced back 22, advancers over decliners about 5-4 & NAZ went up 21. The MLP index fell 1+ to the 256s & the REIT index was off 3 to the 379s on profit taking. Junk bond funds crawled higher while Treasuries were sold. Oil inched higher in the 63s & gold tumbled 14 to 1277 to a 4 month low.
AMJ (Alerian MLP Index tracking fund)
club.ino.com/trend/analysis/stock/BAC?a_aid=CD3289&a_bid=6ae5b6f7
Johnson & Johnson's (JNJ), a Dow stock & Dividend Aristocrat, mounting legal costs ate into its Q1 profits, which dropped 14% as it fights Ks of lawsuits over its talc baby powder & shelled out almost $400M to settle 25K cases over its blockbuster blood thinner Xarelto. Still, the health company reported better-than-expected earnings & its shares rose. EPS was $1.39, down from $1.60 a year earlier. When adjusted, EPS was $2.10, above the $2.03 estimate. “The strength of our first quarter results reinforce the confidence we have in our broad-based business,” CFO Joseph Wolk said. “We continue to manage our portfolio with discipline and make investments across the enterprise that position as well to achieve long-term sustainable growth across three vital aspects of health care.” Legal expenses have mushroomed in recent months. The company spent $423M on litigation expenses during Q1, on top of $1.29M during Q4. Its legal costs during Q1 were essentially zero. The bulk of its legal costs during Q1 came from its settlement of more than 25K lawsuits over the blockbuster blood thinner Xarelto. The $775M settlement was split with its European partner on the drug, Bayer, leaving JNJ with a $387.5M bill. “While there have been several trials where juries have awarded significant verdicts against Johnson & Johnson [in the talc cases], each one that has been heard on appeal have been overturned,” the company said. The talc litigation accounted for just 10% of the company’s $1.29B in legal costs during Q4. Sales barely budged, rising to $20.02M from $20.01B from last year. Analysts expected a decline to $19.61B. More than ½ its revenue came from prescription drug sales, which rose to $10.24B from $9.84B in the year-earlier quarter. Analysts were expecting revenue of $9.83B. The company narrowed its full-year EPS forecast to $8.53-8.63 from its previous estimate of $8.50-8.65. It didn't change its projected sales of $80.4-81.2B for 2019. Prescription drug sales helped boost earnings, despite new generic drug competition against its Zytiga prostate cancer drug.The stock rose 3.96.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
J&J’s first-quarter earnings drop 14% as legal costs soa…
US manufacturing output unchanged in March
Buyers at the opening bid stocks higher, but that enthusiasm did not last. The Dow has pulled back 100 since then. Earnings from the big banks have been short of impressive & economic data, as factory output above shows, continues to be sluggish. Trade disputes & the strong $ are among the dark clouds bothering investors. Meanwhile the Dow has been able to stay near its record highs, encouraging for the bulls.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 63.19 | -0.21 | -0.3% |
| GC=F | Gold | 1,277.90 | -13.40 | -1.0% |
Profits rose by double-digits percentage points at Bank of America (BAC) in Q1, underscored by a
bustling consumer banking operation amid what its top executive called
solid US economic growth. EPS rose to 70¢, higher than expectations.
Revenue in the 3 months thru Mar was $23B, slightly less
than estimates. Overall, average deposits grew 5% to $1.4T, while average loans rose 4% to $897B. “Economic
growth and consumer activity in the U.S. continue to be solid,
businesses of every size are borrowing and driving the economy, and
asset quality is strong,” CEO Brian Moynihan said. On top of higher earnings in some of its key
business segments, the firm also trimmed costs 4%, or $500M. Deposits
in its consumer banking division grew 3% to $697B,
spurring a 7% rise in revenue to $9.6B. Sector-wide,
profits rose 25% to $3.2B. The increases helped offset
losses in the investment banking division, which saw revenue drop
slightly to $4.8B due to lower trading fees. The stock fell 72¢.
If you would like to learn more about BAC, click on this link:club.ino.com/trend/analysis/stock/BAC?a_aid=CD3289&a_bid=6ae5b6f7
Bank of America exceeds 1Q profit estimates amid 'solid' US economic growth
Johnson & Johnson's (JNJ), a Dow stock & Dividend Aristocrat, mounting legal costs ate into its Q1 profits, which dropped 14% as it fights Ks of lawsuits over its talc baby powder & shelled out almost $400M to settle 25K cases over its blockbuster blood thinner Xarelto. Still, the health company reported better-than-expected earnings & its shares rose. EPS was $1.39, down from $1.60 a year earlier. When adjusted, EPS was $2.10, above the $2.03 estimate. “The strength of our first quarter results reinforce the confidence we have in our broad-based business,” CFO Joseph Wolk said. “We continue to manage our portfolio with discipline and make investments across the enterprise that position as well to achieve long-term sustainable growth across three vital aspects of health care.” Legal expenses have mushroomed in recent months. The company spent $423M on litigation expenses during Q1, on top of $1.29M during Q4. Its legal costs during Q1 were essentially zero. The bulk of its legal costs during Q1 came from its settlement of more than 25K lawsuits over the blockbuster blood thinner Xarelto. The $775M settlement was split with its European partner on the drug, Bayer, leaving JNJ with a $387.5M bill. “While there have been several trials where juries have awarded significant verdicts against Johnson & Johnson [in the talc cases], each one that has been heard on appeal have been overturned,” the company said. The talc litigation accounted for just 10% of the company’s $1.29B in legal costs during Q4. Sales barely budged, rising to $20.02M from $20.01B from last year. Analysts expected a decline to $19.61B. More than ½ its revenue came from prescription drug sales, which rose to $10.24B from $9.84B in the year-earlier quarter. Analysts were expecting revenue of $9.83B. The company narrowed its full-year EPS forecast to $8.53-8.63 from its previous estimate of $8.50-8.65. It didn't change its projected sales of $80.4-81.2B for 2019. Prescription drug sales helped boost earnings, despite new generic drug competition against its Zytiga prostate cancer drug.The stock rose 3.96.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
J&J’s first-quarter earnings drop 14% as legal costs soa…
US manufacturing output was unchanged in Mar after 2 straight monthly declines, leading to the largest quarterly
decrease in production since 2017. The Federal Reserve said manufacturing production last month was restrained by weak motor
vehicle output. Data for Feb was revised up to show output at
factories falling 0.3% instead of declining 0.4% as
previously reported. The forecast called for manufacturing output edging up 0.1% in Mar. Production at factories dropped at a 1.1%
annualized rate Q1. That was the first quarterly drop
since Q3-2017 & followed a 1.7% pace of
increase in the Oct-Dec period. Motor vehicles & parts
production dropped 2.5% last month after increasing 2.3%
in Feb. An inventory overhang in the automobile sector is weighing
on production, contributing to factory employment declining in Mar for
the first time since Jul 2017. Excluding motor vehicles and parts, manufacturing output rose 0.2% in Mar after falling 0.5% in Feb. The
outlook for the manufacturing sector, which accounts for about 12% of the economy, is cloudy. A survey from the NY Fed yesterday showed a measure of future business activity in NY state
dropped to a more than 3-year low in Apr, with companies downbeat
about new orders & shipments. Manufacturing is slowing as
stimulus to capital spending from last year’s $1.5T tax cut
package diminishes. Activity is also being hobbled by a trade war
between the US & China as well as by last year's surge in
the $ & softening global economic growth, which are hurting
exports. The
flat manufacturing output in Mar together with a 0.8% drop in
mining, lead to a 0.1% dip in industrial production in Mar.
Industrial output edged up 0.1% in Feb. It fell at a 0.3% rate in Q1 after rising at a 4.0% pace in Q4. Utilities output gained 0.2% in Mar. Capacity
utilization for the manufacturing sector, a measure of how fully firms
are using their resources, slipped to 76.4% last month from 76.5% in Feb. Overall capacity use for the industrial sector fell
to 78.8% from 79.0% in Feb. It is 1.0
percentage point below its 1972-2017 average. Officials at the Fed tend
to look at capacity use measures for signals of how much “slack”
remains in the economy how far growth has room to run before it becomes
inflationary.
US manufacturing output unchanged in March
Buyers at the opening bid stocks higher, but that enthusiasm did not last. The Dow has pulled back 100 since then. Earnings from the big banks have been short of impressive & economic data, as factory output above shows, continues to be sluggish. Trade disputes & the strong $ are among the dark clouds bothering investors. Meanwhile the Dow has been able to stay near its record highs, encouraging for the bulls.
Dow Jones Industrials
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